Taxation and International Migration

Forskningsenhed: CEBR


Abstract:
Tax-induced international mobility of talent is a crucial public policy issue,especially when tax rates differ substantially across countries and immigration barriers are low as in the case of the European Union. In this case, high tax rates on high-paid workers may induce such workers to migrate to countries where the tax burden on high-income individuals is lower. Therefore, international mobility may severely limit the ability of governments to redistribute income through highly progressive taxation. This problem is particularly acute in a country such as Denmark, which imposes higher tax rates on workers than most other countries.

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You can read the Working paper Migration and Wage Effects of Taxing Top Earners: Evidence from the Foreigners' Tax Scheme in Denmark, The Quarterly Journal of Economics (2014) 129 (1): 333-378. Henrik Jacobsen Kleven, Camille Landais, Emmanuel Saez, Esben Schultz here